Friday, 23 March 2012

The day the music died from Chancellor's hidden "Granny Tax"

By John C. Dyer, UK Correspondent

21 March 2012. The Coalition crossed the line over which it had teetered for weeks. That line is the public's tolerance for spin.

On 21 March 2012, the Chancellor presented the annual budget review. In the new budget the Coalition made multiple changes in tax rate. The net effect of the details will be analyzed and argued for weeks to come.

But the headlines 22 March 2012 were generally brutally direct. One paper, The Star, provided the Coalition the headline it would have wanted (2 million will receive tax reductions). Others looked past a typically £220 annual tax reduction from what in the US would be called fiddling with the brackets. They focused instead upon the alleged funding of the Coalition's elimination of the nation's highest tax rate (50p on the pound) for the best off by reducing benefits to the retired. The papers which blasted the headline comparison, dubbed the “Granny Tax,” included the Guardian, the Daily Mail, the Daily Telegraph, the Daily Express and the Sun, papers not often untied by a viewpoint. The Sun was particularly brutal. Even the more restrained Times headlined it as the Chancellor’s 50p “gamble.”

In evaluating the severity of press reaction, one of Andrew Neil’s guests on the 22 March BBC daily politics show sniffed it was typical of the Conservative press to distance themselves from the Conservatives mid Parliament only to come together with them at the general election. But the respected Neil, former editor of the Times, opined that he could not remember a budget so widely and severely panned by the press, and BBC political correspondent Norman Smith hazarded the opinion that the Granny Tax headline had the soundings of a spin that would “take” over time.

As one who became a Republican a generation ago for the reasons many moderate Republicans still do, I think the first pundit misguages the reaction. Moderate "conservatives" cherish fiscal responsibility and integrity, not lining the pockets of rich "friends." It will have been a mistake if the Coalition has taken the support of such moderates for granted.

Moreover, as pointed out by BBC’s Norman Smith, the reaction is only beginning to unfold. The press and public are only beginning to digest and understand the budget details. Already it is clear that the discrepancies within the budget are far more profound and disturbing than even the headlines indicated. Channel 4 News pointed that out the night of 21 March. And the Daily Mail online had begun the analysis by 22 March.

Hiding the hit on pensioners

During the BBC Daily Politics Show 22 March, presenter Andrew Neil ruthlessly and thoroughly exposed some of these discrepancy, shredding both a Tory and a Liberal Democrat MP, exposing how little of the budget detail these MP's knew. Neil repeatedly exposed the disguised nature of the announcement that hid the hit on the pensioners. He pointed out that one of the features in the press reaction may well have been the covert handling of the hit on the pensioners, disguised in the advance publicity and Chancellor’s descriptions as “tax simplification.” Coverage in the Daily Telegraph that day seemed to underscore Neil's observations.

Having been intimately involved in public budgets for over 30 years, let me assure them all, if indeed they needed to be assured, they have only begun to find all the nuggets buried in the detail. For instance, the budget contains £10 bil TBA unitentified further cuts to welfare by the end of the Parliament. Leaving aside the how, consider, without this "reduction" would borrowing have been £10 bil higher? What does this say about whether austerity is working?

Labour wasted no time capitalizing on this element. In an uncharacteristically brilliant stroke during his rebuttal to the Chancellor, Labour Leader Ed Milliband pointedly asked the Cabinet seated beside the Chancellor whether they (many of whom are millionaires) would gain or lose from the 50p proposal and related "Mansion Tax."

Only Defence Secretary Philip Hammond had the presence of mind during a painful 5-8 minutes to shake his head, “no.” When the Chancellor later said he would not benefit, it was already too late. The perception that the wealthy Cabinet was about to personally benefit from the tax changes they were instituting had taken. His denial, too, was seen as somehow evidence of their having taken advantage of their positions to take care of themselves and their friends. To say nothing of a Prime Minister pressed on whether or not he benefited by a reporter insisting his tax records are "private."

Almost from the delivery of the budget 21 March, Liberal Democrats fruitlessly endeavored to distance themselves (or defend the budget, as did a struggling Simon Hughes on BBC). But the press is not about to let them off the hook.

The Liberal Democrats have only themselves to blame for their predicament.

In a widely known experiment, experimental psychologists placed a large number of frogs in boiling water. The frogs jumped out immediately. But when the psychologists slowly turned up the heat, the frogs remained in the vat until boiled alive.

I have been reminded of that experiment as I watched the Liberal Democrats flounder successively with Tuition Fees, Welfare Reform, and NHS Reform, all now adopted by their Coalition government. They have participated in measures widely believed to endanger the NHS and damage the vulnerable. They have been seen to sacrifice their student base for political connection. As of 22 March 2012, Liberal Democrats appear to be thoroughly scalded by their participation in these successive measures.

One wonders if they will ever jump, but beneath the efforts at remaining loyal it is clear the successive surrender of their own values for the good of the partnership is taking a toll. Both on party membership and operative's loyalty.

What next?

It is not clear when or if Liberal Democrats will finally have had enough. It is not clear if the headline disenchantment of the conservative press is more than a transient thing. But I don't think it is transient. It began with the NHS and workfare battles. The budget is only the clearer "I caught you red handed." It seems clear to me that 21 March 2012 the music died for the Coalition’s “big four” of David Cameron, George Osborne, Nick Clegg, and Danny Alexander. They have stepped over a line and been slapped with near universal anger and condemnation.

My hunch is the reaction will snowball. The snowball will continue to gather dirt in the weeks ahead as the press and opposition discover new nuggets buried in the detail, and as the burial in the detail is interpreted through the experience of the “Granny Tax” discovery and its perceived offset to a give away to millionaires including the Cabinet. The analysis of a budget whose press history begins with such an unhappy discovery as this budget's concealed hit on the elderly is likely to be interpreted under the colour of that discovery for weeks to come, if not all the way through to the next General Election.

Comments

21 March 2012. The Coalition crossed the line over which it had teetered for weeks. That line is the public's tolerance for spin.

On 21 March 2012, the Chancellor presented the annual budget review. In the new budget the Coalition made multiple changes in tax rate. The net effect of the details will be analyzed and argued for weeks to come.

But the headlines 22 March 2012 were generally brutally direct. One paper, The Star, provided the Coalition the headline it would have wanted (2 million will receive tax reductions). Others looked past a typically £220 annual tax reduction from what in the US would be called fiddling with the brackets. They focused instead upon the alleged funding of the Coalition's elimination of the nation's highest tax rate (50p on the pound) for the best off by reducing benefits to the retired. The papers which blasted the headline comparison, dubbed the “Granny Tax,” included the Guardian, the Daily Mail, the Daily Telegraph, the Daily Express and the Sun, papers not often untied by a viewpoint. The Sun was particularly brutal. Even the more restrained Times headlined it as the Chancellor’s 50p “gamble.”

In evaluating the severity of press reaction, one of Andrew Neil’s guests on the 22 March BBC daily politics show sniffed it was typical of the Conservative press to distance themselves from the Conservatives mid Parliament only to come together with them at the general election. But the respected Neil, former editor of the Times, opined that he could not remember a budget so widely and severely panned by the press, and BBC political correspondent Norman Smith hazarded the opinion that the Granny Tax headline had the soundings of a spin that would “take” over time.

As one who became a Republican a generation ago for the reasons many moderate Republicans still do, I think the first pundit misguages the reaction. Moderate "conservatives" cherish fiscal responsibility and integrity, not lining the pockets of rich "friends." It will have been a mistake if the Coalition has taken the support of such moderates for granted.

Moreover, as pointed out by BBC’s Norman Smith, the reaction is only beginning to unfold. The press and public are only beginning to digest and understand the budget details. Already it is clear that the discrepancies within the budget are far more profound and disturbing than even the headlines indicated. Channel 4 News pointed that out the night of 21 March. And the Daily Mail online had begun the analysis by 22 March.

Hiding the hit on pensioners

During the BBC Daily Politics Show 22 March, presenter Andrew Neil ruthlessly and thoroughly exposed some of these discrepancy, shredding both a Tory and a Liberal Democrat MP, exposing how little of the budget detail these MP's knew. Neil repeatedly exposed the disguised nature of the announcement that hid the hit on the pensioners. He pointed out that one of the features in the press reaction may well have been the covert handling of the hit on the pensioners, disguised in the advance publicity and Chancellor’s descriptions as “tax simplification.” Coverage in the Daily Telegraph that day seemed to underscore Neil's observations.